This is getting pretty darn obscure, but here’s the gist of what the Legislature’s urban renewal interim committee has been wrestling with this afternoon: Two laws on the books appear to conflict, with one requiring a revenue allocation area’s base value to be “reset” to current market value when an urban renewal plan is modified. That raises the question of whether any annexation to a revenue allocation area would force a re-set.

Alan Dornfest of the Idaho State Tax Commission said that’s not how the Tax Commission has ever interpreted it or structured its rules. The commission has always administered the process with the assumption that “base resetting was not contingent on annexation,” Dornfest said. “If that was in error, so be it. But that was the interpretation we gave to this for many, many decades. So I hope that helps clarify.” If an annexation forced a re-set of the base for the revenue allocation area to current market values, Dornfest noted, there’d be “no point in doing an annexation,” because the full increment to date would be lost.

“I feel that there’s a colorable argument for the way that we’ve been interpreting it,” Dornfest told the lawmakers. “Now if that’s not following policy, by all means we would suggest clarification in the statute, and we’ll of course follow policy.”

Sen. Dan Johnson, R-Lewiston, the panel’s co-chair, said, “I’m not going to beat this thing into the ground. … I’m satisfied with those answers.” Sen. Mary Souza, R-Coeur d'Alene, thanked Dornfest for the "excellent" information he provided to the committee.

The lawmakers asked Dornfest to explore whether the state Tax Commission could serve as a central repository where people could see or find links to all the urban renewal revenue allocation areas and plans from around the state. Dornfest said the Tax Commission doesn’t track all urban renewal agencies – just those with revenue allocation areas. “These are the ones that have made it to our radar screen, where they have tax implications,” he said. “We review all the tax levies of all the districts.”